- The USD/INR is trading slightly above the 83.0000 as of this writing.
- The currency pair saw a high of nearly 83.3520 exhibited very early in January, but by the 5th of the month a mark of 83.1800 was produced.
- The price range in the USD/INR has maintained rather steady resistance just below the 83.1800 since the first week in January and what has been interesting is the incremental trend lower.
It needs to be pointed out the USD/INR hit a low of nearly 82.7300 on the 12th of January; this lower level has proven to be an outlier. Since touching this value, which had last been seen in the third week of September, the USD/INR in the month of January has produced rather support near the 82.9800 ratio. Intriguingly the lower price movement of the USD/INR has renewed suspicion of a potential downturn, but speculators should be careful because the Reserve Bank of India always lurks. Was the move to lows in mid-January sparked by an intervention?
Reserve Bank of India and Speculation of USD/INR
While the USD has shown a rather sizeable amount of strength within most major currency pairs, it must be pointed out the USD/INR has actually demonstrated a remarkable amount of price stability in January and can be argued to have exhibited a stronger Indian Rupee. The lower near-term support elements of the USD/INR are being tested as of this morning.
The Reserve Bank of India is a major factor in the value of the USD/INR. The central bank of India has said it has no intention of cutting interest rates in the near-term and that inflation remains a concern, but this is happening as the Reserve Bank of India practices a heavy hand regarding the ‘free movement’ of the Indian Rupee via its own interventions. The rather strong oversight from the central bank creates the belief that traders who are using technical indicators to pursue narrow support and resistance levels, need to remain aware of potential sudden moves by the Reserve Bank of India regarding the USD/INR.
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USD/INR Move below 83.0000 and ‘Allowable’ Downturns
- The U.S Federal Reserve will be releasing its FOMC Statement on the 31st of January; the rhetoric regarding monetary policy must be given attention.
- The ability of the USD/INR to sustain momentum below the 83.000 level should be watched. The question is if the government of India is going to allow a stronger Indian Rupee to flourish?
If the USD/INR were to create a solid and durable move below the 83.0000 it may spark interest in bearish bets on the currency pair. Support has proven rather strong at the 82.9000, a move below this depth would get the interest of speculators, but they should be careful not to get overly ambitious because dangers they cannot control certainly exists within the currency pair.
USD/INR Outlook for February 2024
Speculative price range for USD/INR is 82.7000 to 83.2100
The USD/INR has not traded in a correlated manner with the major global Forex market. The ability of the USD/INR to actually track lower recently and maintain rather steady resistance is remarkable. It also points out the USD/INR may have a ‘strong hand’ guiding its value from the Indian government. The fact that a major election will take place in India this spring is noteworthy, and the desire to make sure the USD/INR remains stable for the next handful of months is a likely scenario.
The price range of the USD/INR has been steady and this allows for technical wagers in the currency pair. Yet traders need to use risk taking tactics wisely to guard against sudden moves which come unannounced from the Reserve Bank of India. Support and resistance levels can be used to ignite quick hitting speculative bets in the USD/INR, but the use of stop loss and take profit orders are essential to make sure there are controllable speculative measures being used in case sudden strong reversals take place.
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